Chang’s book then explores the workings of multilateral institutions (WTO, WB and IMF) and exposes the double standards they impose on countries of the Global South through regulations and conditions that countries of the Global North never followed themselves on their path to economic development. Quite the opposite, actually. And yet, the proponents of neo-liberalization (often operating from the multilateral institutions) behave as if the story of development was one of uninterrupted liberalization and pure free market rule.

Indeed, as Chang demonstrates, this is not the case. Chang illustrates this, for instance, with the fact that it was the first Secretary of the US Treasury, Alexander Hamilton, who came up with the concept of ‘infant industry’. The concept covers the idea that emerging industries should be protected through a variety if regulations until they are strong enough to face competition on the then-international (now global) market. Chang further shows that Western countries indeed exercised enormous protectionism to shield their industries throughout their development. Only once they felt these industries could become internationally dominant did they open their market to international competition.

And yet, the multilateral institutions demand that countries of the Global South open their market, often unconditionally, to global competition and foreign investments without giving these countries the time not just to develop their own infant industries, but even without the solidification of social institutions necessary for a functioning market. The results have been expectedly disastrous, as these institutions themselves have begun to acknowledge.

And let’s not forget the massive agricultural subsidies and intellectual property regulations that countries of the Global North are able to marshal through multilateral institutions while countries of the Global South are prevented from enacting similar measures and sanctioned for doing so.

These few remarks suffice to show that Change is not anti-capitalist or anti-global trade. As mentioned before, he is anti-hypocrisy and double standards. His perspective is more akin to what Manuel Castells calls the “developmental state” (as opposed to “statist” which applies to the former USSR, for instance). Being Korean, it is not a surprise for Chang to adopt such a perspective. Castells indeed demonstrates that the success of the Asian Tigers (Taiwan, South Korea, Singapore, for instance) was based not on openness to the global market but on the support of the developmental state.

All of these countries have had majorly interventionist governments throughout their developmental years. During these years, the developmental states nurtured infant industries, allowing them to not be profitable while growing (Toyota, for instance, was a quasi-bankrupt company for a long time… so was Nokia, for about 17 years). The developmental states limited foreign investment and directed it into specific industries, imposed strong barriers. These countries slowly and progressively opened to the global market when they were ready. For instance, Korea progressively privatized industries once those proved competitive under government ownership. Indeed, the developmental state has been historically the most successful model for economic development.

Based on a developmental conception of the state, Chang then proceeds to debunk, with data, the major tenets of the neo-liberal dogma (as it is promoted with the zeal of religious dogma by the “bad samaritans”). For instance, the idea that government is always less efficient than the market (the current debate about health care in the US provides a nice example of the opposite). Chang also challenges the pillars of modernization theory, especially on the cultural deterministic conception of economic development.

Most of all, Chang’s book is a fairly thorough, data-based, balanced and very readable primer on the global economy, economic history, and global governance. It provides multiple examples from all over the world to expose the basic unfairness of the current regulatory regime (to use Alain Lipietz’s concept).

And, of course, how can one not enjoy a major take-down of Thomas Friedman (although it is like shooting fish in a barrel at this point)?

Many points that Chang makes will be familiar with readers of Manuel Castells (as mentioned above), Joseph Stiglitz or Amartya Sen. Readers will find the same concern for social justice based on rigorous economic analysis. At the same time, Chang also involves social and political factors as they, of course, influence economic decision making and as part of the global governance regime.

For instance, politics and governmentality is important when discussing corruption, often used as a convenient excuse to maintain unfair terms of trade and insufficient levels of aid. Here, to use again one of Manuel Castells’s concept, Chang explores the important of the “Predatory State” as a major explanation for African issues. There is no doubt that African nations have had their share of corrupt dictators that used the means of the state to engage in systematic looting (along with major violations of human rights) of their countries. But here again comes the hypocrisy of Western nations: many of these dictators were installed and supported, often by their former colonizers as part of the neo0colonialist regime. And quite often then, Western nations, now so concerned about corruption, turned a blind eye when a favored dictator engaged in questionable practices.

At the same time, in many developing countries, corruption is what makes things work (something I already discussed here) in the absence of fully developed social institutions regulating social life. And as Chang demonstrates, corruption, in that context, can sometimes even have positive effects on economy and development. So, here again, a balanced view is de rigueur.

This case illustrates as well another failing of the current global governance regime: its imposition of one-size-fit-all programs on developing countries (for instance, through structural adjustment programs) even though the situations in which developing countries find themselves vary wildly.

As I said, one of the strong points of this book is how highly readable it is considering the topic and considering how chock full of data and case studies it is. It addresses all the major issues of the current global system and it is especially relevant in the current context.

Unsurprisingly, things will not improve as yet another unfavorable trade agreement with the European Union is about to be implemented. Under the guise of "free trade", subsidized EU agricultural products will undercut local products.

Denis Colombi has some interesting considerations regarding the connections between solidarity economics and art / culture (hey, look who posted about solidarity economics before it was cool to do so!). As usual, I’ll summarize as best I can Denis’s points and add my comments when relevant.

There are already common images when it comes to solidarity economics: fair trade, microcredit of the Grameen Bank-type, local exchange systems. In his post, Colombi focuses more on different sectors: cultural and artistic production while locating solidarity economics squarely in the field of economic sociology. Following Polanyi, sociologists emphasize the plural character of the economy organized around three poles: (1) a market economy where resources are allocated by the market based on financial interests, (2) a non-market economy where allocation is based on public policy, and (3) a non-monetary economy where social relations sustain exchanges and activities. Solidarity economics belongs to that third pole (as does nousehold economics).

It is certainly true that the first pole dominates in Western capitalist societies, but not because it is some sort of "natural" or "default setting" but as socially and historically-constructed product. Solidarity economics allows us to rethink the connections between society and economy, whose political, ideological or even academic separation is problematic as they are thoroughly interconnected and interdependent.

But solidarity economics is not just a mode of analysis. It is a political project as well, dedicated to the citizens’ reappropriation of economic behavior. In particular, solidarity economists reject the disembedding of economy from society where individuals are reduced to basic behavior: consume, produce, save, and where a full understanding of the system is left to "experts" such as the economist or the politician. Against such a disembedded view, solidarity economists reestablish the agency and understanding of people’s actions and work to make visible the actual and always present (only ideologically hidden) social embedding of economic behavior as invested with meaning by social actors who modify their behavior based on such meaning (how very interactionist!).

Solidarity economists’ goals do not limit their analysis and action with the third pole of economic activity. They also work toward the hybridization of the market and non-market poles. In this sense, solidarity economics is not simply what’s left unaccounted for once after allocation through the market and non-market poles; it is a thorough social project that touches upon domains beyond the economy that seeks to overcome the three poles conception. But what is still unclear, for Colombi, is the exact place of solidarity economics with respect to the market and public policy.

[And here, let me plug again my own post: in his post, Colombi deplores the lack of "fleshing out" of solidarity economics… my own post provided specific projects that were already up and running with their own institutional structures.]

So, we know that market economy’s basic principle is profitability, that of public policy is… hell, who knows… actually, referring to French cultural policy since Malraux, Colombi posits it as excellence (as defined by expert groups who allocate funcing). In both cases, solidarity economists note the lack of public participation or expression of desires and values thereby locking artistic production in spheres of either elitism or conservatism, both stifling innovation. So, solidarity economics has an uphill battle not just against the market and its profit principle but also against the public economic sector.

In the art and cultural domains, as Colombi underlines, the conditions might be favorable to solidarity economics thanks to UNESCO agreements signed by nations on cultural diversity that public policies are expected to support. These UNESCO agreements refer to the equal dignity of all cultures and the idea of free choice when it comes to individual cultural participation. Therefore, cultural rights become a necessary part of cultural policy as long as they do not diminish others’ dignity (take that cultural relativists and supporters of FGM in the name of culture). From this perspective, then, both the market and public policy become tools to satisfy individual cultural rights rather than producers of cultural goods at the exclusion of people. But they are not the only and exclusive tools, there is a place here for solidarity economics to carve a space as well. Actually, it might be a more adapted tool to satisfy cultural rights.

But all in all, Colombi seems frustrated with what he has read of solidarity economics especially when it comes to the social construction of economic institutions and how solidarity economics can take its place compared to the market and public policy (again, I’d be curious to read what he thinks of the examples I have discussed in my own post). Beyond economic sociology, there is also the question of social movements: what of the mobilization of actors around common principles and projects? What modes of collective action(s) are necessary? Is there a need for a hot cause / cool mobilization? Which groups work are involved in this (beyond the usual suspect of the alter-globalization movement)? What identity production needs to emerge here?

For Colombi, solidarity economics still has a long way to go… heck, it probably needs some academic anchoring too, and I don’t see that happening.

Just as I was reading the article I shall discuss below on the need to reform the Washington Consensus system, I saw this great and very relevant cartoon that Carlos Serra had posted on his blog and I could not resist (other great comics by Gado are available on his website):

The article by David Held I wanted to discuss here is"At The Global Crossroads: The End of the Washington Consensus and The Rise of Global Social Democracy?" in Globalizations, May 2005, Vol. 2, No. 1, pp. 95-113. Held is well known for his conceptualizations on global governance as he has published extensively on the subject. The article offered here is, to put it simplistically, a short version of his book Global Covenant: The Social-Democratic Alternative to the Washington Consensus.

Held’s conception of globalization is increased interconnectedness that created overlapping communities of fate as opposed to discrete national communities of the Westphalian order. Globalization is multi-layered and is not just economic, but political and cultural as well. The question of global governance is especially crucial for Held as greater interconnectedness involves a greater reach of a body of international laws dedicated to the promotion of justice. A great deal of this body of human rights juridical activity came about after World War II and the Holocaust.

"[Those involved in drafting these universal principles of human rights] rejected the view of national and moral particularists that belonging to a given community, limits and determines the moral worth of individuals and the nature of their freedom, and they defended the irreducible moral status of each and every person. The principles of equal respect, equal concern and the priority of the vital needs of all human beings are not principles for some remote utopia; they are at the centre of significant post-Second World War legal and political developments." (96)

The global crossroads mentioned in the title of the article refer to the dilemma faced by the international community: promote and extend this human rights regime, or let be eroded and dismantled. And Held is rather pessimistic (remember, that was in 2005 although I don’t think there is much reason to be more optimistic now). For Held, the human right regime is particularly threatened by four crises:

1. The collapse of the Cancún trade talks

And the correlative rise in bilateral and preferential trade agreements. This goes back to the fact that the global trade system is rigged against developing countries and therefore is of questionable legitimacy.

2. Little progress on the Millenium Development Goals

I have blogged extensively on the MDGs and the lack of progress is attaining these goals is a massive failure of the moral conscience of the international community. I would add that this is even more shameful now considering that the cost of reaching these goals does not compare to the money poured into the financial system to rescue the developed economies.

3. Little progress on a sustainable framework to deal with global warming

And the lack of real progress at Poznan shows that this is still an issue today and we are already witnessing some of the effects of this in the form of more frequent violent storms, resource wars (especially for water, oil and land) as well as climate migrants and refugees.

4. The threats to the multilateral order by the unilaterialism initiated by the US in Iraq

Incidentally, the change in administration might not change much on that. The additional problem is that other countries can use the same doctrine to go it alone against defined enemies, further undermining the multilateral order and weakening the UN system.

All these crises are both symptoms of increased interconnectedness and crises that threaten the global order. According to Held, what is missing is greater integration and greater commitment to social justice. This is so for two main reasons: the Washington Consensus and the Washington Security Agenda.

The Washington Consensus

This one is well known and rather well defined. It is understood as the underpinning of the global spread of global capitalism through liberalization. The Washington Consensus was promoted and pushed though global institutions such as the IMF and the World Bank who imposed conditions – structural adjustments – on developing countries, forcing them into integration into the global market.

This Washington-driven economic agenda has come under heavy criticism for a number of reasons and after years of being forced on developing countries, it does not have much to show for it. Held (99) cites three major points made by Branko Milanovic (2003: 679):

How to explain why after sustained involvement and many structural adjustment loans, and as many IMF Stand-bys, African GDP per capita has not budged from its levels of 20 years ago. Moreover, in 24 African countries, GDP per capita is less than in 1975, and in 12 countries even below its 1960s level;

How to explain the recurrence of Latin crises, in countries such as Argentina, that months prior to the outbreak of the crisis are being praised as model reformers;

How to explain… ‘pupils’ among the transition countries (Moldova, Georgia, Kyrghyz Republic, Armenia), after setting out in 1991 with no debt at all, and following all the prescriptions of the IFIs, find themselves 10 years later with their GDPs halved and in need of debt-forgiveness.

So, on the one hand, the Washington Consensus failed many developing countries and at the same time, the countries that have experienced growth and development are those that stayed outside of that system (China and the emerging Asian tigers as well as India, for instance).

"There is much evidence to suggest that a country’s internal economic integration – the development of its human capital, of its economic infrastructure and robust national market institutions, and the replacement of imports with national production where feasible – needs to be stimulated iniitally by state-leg economic and industrial policy. The evidence indicates that higher internal economic integration can help generate the conditions in which a country can benefit from external economic integration (Wade, 2003). The development of state regulatory capacity, a sound public domain and the ability to focus investment on job creating sectors in in competitive and productive areas is more important than the single-minded pursuit of integration into world markets." (100)

The Washington Consensus has eroded the state capacity to promote internal integration, promoted the misleading view that there is only one path to development and growth and aggravated the major asymmetries of global market access and power and therefore made things worse for developing countries.

"Leaving markets to resolve alone problems of resource generation and allocation misses the deep roots of many economic and political difficulties; for instance, the vast asymmetries of life chances within and between nation-states which are a source of considerable conflicts; the erosion of the economic fortune of some countries in sectors like agriculture and textiles while these sectors enjoy protection and assistance in others; the emergence of global financial flows which can rapidly which can rapidly destabilize national economies; and the development of serious transnational problems involving the global commons. Moreover, to the extent that pushing back the boundaries of state action or weakening governing capacities means increasing the scope of market forces, and cutting back on services which have offered protection to the vulnerable, the difficulties faced by the poorest and the least powerful – north, south, east and west – are exacerbated. The rise of ‘security’ issues to the top of the political agenda reflects, in part, the need to contain the outcomes which such policies provoke.

The Washington Consensus has, in sum, weakened the ability to govern – locally, nationally and globally – and it has eroded the capacity to provide urgent public goods. Economic freedom is championed at the expense of social justice and environmental sustainability, with long-term damage to both. It has confused economic freedom and economic effectiveness." (102)

Attempts at reforming the Washington Consensus have been meek and unconvincing. For Held, the alternative lies with a social-democratic approach. Held defines social-democratic view as follows:

"Traditionally, social democrats have sought to deploy the democratic institutions of individual countries on behalf of a particular project: a compromise between the powers of capital, labour and the state which seeks to encourage the development of market institutions, private property and the pursuit of profit within a regulatory framework that guarantees not just the civil and political liberties of citizens but also the social conditions necessary for people to enjoy their formal rights. Social democrats rightly accept that markets are central to generating economic well-being, but recognized that in the absence of appropriate regulation they suffer various flaws, especially the generation of unwanted risks for their citizens and an unequal distribution of those risks, and the creation of negative externalities and corrosive inequalities." (103)

The problem is then how to extend social-democratic policies on a global scale in the context of diminished capacities of the states. That is the major challenge for Held: how to create a global social democracy based on transparency, accountability, commitment to social justice, equitable distribution of life chances, public management of global flows of various sorts, corporate governance and environmental sustainability. Held provides a fairly detailed laundry list to make this happen. And, again, the question of cost is no longer a valid one in the context of massive bailouts.

The Washington Security Agenda

For anyone who has been following the doctrines of the Bush administration, this is a familiar story of the US policy after the terrorist attacks of 9/11. The choice faced by the US government was to either strengthen the multilateral order or to undermine it. We all know which path the administration chose.

"After 9/11, the US and its major allies could have decided that the most important things to do were to strength international law in the face of global terrorist threats, and to enhance the role of multilateral institutions. They could have decided it was important that no single power or group should act as judge, jury and executioner. They could have decided that global hotspots like the Middle East which feed global terrorism should be the main priority. They could have decided that the disjuncture between economic globalization and social justice needed more urgent attention. And they could have decided to be tough on terrorism and tough on the conditions which lead people to imagine that Al-Qaeda and similar groups are agents of justice in the modern world." (106)

They decided none of these things and the rest is history with side effects with long-term impacts and none of the issues above addressed.

In other words, both the Washington Consensus and the Washington Security Agenda are massive failure and this is even more visibly true now than it was when Held wrote his article. But Held does not end with this pessimistic diagnosis. He offers specific prescriptions for a global social-democratic agenda based on some basic principles:

Commitment to the rule of law and development of multilateral institutions

Generation of new forms of legitimacy for global political institutions for security and peace-making

Acknowledgment that ethical and justice issues based on the global polarization of wealth, power and income, the asymmetries of life chances

None of these can be solved by the market. Similarly, security must be reconceptualized from a narrow conception (protection from coercive power and violence) to a broader meaning (economic, political and environmental protection especially for the vulnerable). So, indeed, what Held suggests is a global social covenant to promote fair trade rules, more democracy at the global level, a more just and equitable world order. This is also means a more open mode of governance including the global civil society.

Held was indeed prescient when he wrote this article and the current disastrous financial and economic conditions should, if reason prevailed, mark the end of the Washington Consensus and the final days of the Bush administration should also be the final days of the Washington Security Agenda. However, Held was somewhat pessimistic then, and there is no reason to be less so now. Leadership on these issues will not come from the US. According to Held, the only other likely candidate for such leadership is Europe.

This is truly terrifying. I did not know this was still going on in the world and I do know a lot about the appalling treatment of women and children around the world:

"Child abduction, which is already a serious problem in Cote d’Ivoire, may worsen in the run up to presidential elections later this year as political hopefuls using traditional myths of human sacrifice to improve their electoral chances will fuel an already significant market for stolen children, according to the Ivorian police.

“[Child abduction] is something that needs urgent attention especially in the run-up to the election because a lot of things are going to happen like human sacrifices and other rituals where the organs of children will be particularly in demand,” said Sergeant Antoine Goua Bi, a spokesperson for the child protection unit of the Ivorian police, who says child sacrifice always increases around election times."

Every day, three new cases of children kidnapping are registered with child protection services. Only 1 in 20 will be recovered. The main culprits are soothsayers and the organ traffickers, who slice out hearts, kidneys, lungs and other organs for medical research. Children are also kidnapped into the sex trade, slavery on the cocoa plantations (unless you are careful to buy only fair trade chocolate, 80% of the chocolate you eat is tainted by slavery).

It is detrimental, says Thilo Thielke in Der Spiegel , because it creates unfairness and dependency in many different ways. First, using the case of Kenya, Thielke invokes a classical concept of formal organizational behavior: self-perpetuation.

"The roads are in horrid disrepair, and they’ll stay that way for a while. As a result, it would take days or even weeks to get the corn from the west to the northern parts of the country. But why would they need it there anyway? There’s a shortage in the north because the World Food Program is usually there to hand out food for free. The UN’s employees are paid to fight hunger, and that’s why they usually write reports in which they dramatically portray the situation in Africa and which they usually end with appeals demanding more donated food.

These developmental aid workers, whose reports largely shape our image of Africa, behave this way to a certain extent out of an instinct for self-preservation that they believe the Africans don’t have. Without help, they say, all the Africans will starve. And, indeed, without aid, all the helpers would also be out of a job."

A first problem then is that the persistent handing out of free food (largely surplus from Western countries) eliminates any incentives to be locally self-sufficient. And there is also the idea that the WFP needs people to be hungry in order to justify its existence and work (and some well-paying jobs for UN consultants). Even if some adventurous local entrepreneur tried to start local food production in an area with a numerous malnourished or under-nourished population, the results would likely be disastrous:

The highlight of the second panel I attended on the World Social Forum was the presentation of Mike Menser on the internationalization of solidarity economics.

First, let me provide a primer on solidarity economics with the examples of Via Campesina . the Brazilian Landless Workers Movement (MST ) and Mondragon Cooperative Corporation (Wikipedia ). Solidarity economics starts from the World Social Forum that "another world is possible" and applies to it to economics. The idea is that it is possible to organize economies around principles different than that of global capitalism. According to Ethan Miller , these alternatives already exist:

"Can thousands of diverse, locally-rooted, grassroots economic projects form the basis for a viable democratic alternative to capitalism? It might seem unlikely that a motley array of initiatives such as worker, consumer, and housing cooperatives, community currencies, urban gardens, fair trade organizations, intentional communities, and neighborhood self-help associations could hold a candle to the pervasive and seemingly all-powerful capitalist economy. These "islands of alternatives in a capitalist sea" are often small in scale, low in resources, and sparsely networked. They are rarely able to connect with each other, much less to link their work with larger, coherent structural visions of an alternative economy."

Weeks after the food riots spread around the world, a flurry of articles have been published all over the place, taking stock of what is happening, providing analysis and critique as well as prospects on global food production and policy. So let’s review.

Who’s To Blame for Food Prices?

Speculators

According to the BBC, financial speculation has a lot to do with the soaring food prices:

“It is inevitable that financial investors are going to latch onto any cyclical commodity that’s seeing sharp price rises. Property may have bombed, demand for industrial raw materials may be peaking. Yet everyone has to pay more for food, so why not invest in farm products?

Right now, everything seems to be conspiring to push up basic food prices. From drought to poor crops, from high fuel prices to explosive demand, and changing diets in China and the Far East. And most of all, precious farmland being switched to crops for biofuels.

Small wonder that in their quest for investments to beat inflation, even some traditional pension funds are trading in the likes of wheat, soya beans and livestock.”

“Activists have outed a corporate dirty tricks operation tied to Burger King aimed at discrediting efforts to improve the often horrific conditions of migrant workers in Florida’s tomato fields.

It emerged yesterday that a top Burger King official is being investigated for using his young daughter’s online alias to make derogatory comments about the farm worker group, the Coalition of Immokalee Workers, which is asking the fast food chain to raise tomato pickers’ pay by a cent for every pound picked.

Burger King’s vice president Steven Grover was fingered as the source of venomous online attacks on student activists. “Senior management of the company had no knowledge of Grover’s postings,” Burger King spokeswoman Denise Wilson said. “We are conducting an internal investigation, and appropriate disciplinary action will be taken.”

The farm workers coalition discovered that abusive emails and comments under the names “activist2008″ actually originated at the Miami headquarters of Burger King. The e-mail Internet protocol addresses are the same as Burger King’s.”

Hmm… using your daughter’s online account to accuse activists of being in it for the money, now, that’s courageous and brave. Here is the hilarious (and pathetic) part though:

“Mr Grover has not commented on the episode, but Burger King said “comments attributed to Steve Grover do not reflect Burger King’s desire to find a way to assure decent wages and modern working conditions for the tomato harvesters.””

Well, of course it does not. but that’s not all. Apparently, a security firm has been discovered trying to infiltrate a students’ group supporting the rights of migrant workers. The firm was paid by corporate spies.

“The attempted infiltration of the activists by paid corporate spies was noticed when Cara Shaffer, who described herself as a college student said she wanted to start an activist group at a Virginia university. The activists quickly discovered that she actually heads a company named Diplomatic Tactical Services. She now refuses to discuss her attempted involvement with the farmworker group. A Burger King spokesperson said he “knows nothing about any Burger King effort to spy” on the student group.”

Man, so many coincidences and things happening that BK knows nothing about! Of course, there are no such things as coincidences in such matters. These incidents are coming to light as the US Senate is investigating working conditions of migrant workers, especially tomato pickers, whose wages have not increased since 1978. Many work in quasi-slavery and they get regularly harassed, beaten, abused and intimidated. And many are held in debt bondage, which is the most common contemporary form of slavery.

“Detective Frost said the conditions of some workers in Florida were equivalent as human trafficking. The large tomato producers shield themselves from prosecution by hiring subcontractors, who are responsible for human trafficking, he testified.”

Subcontracting has become the habitual alibi for corporations who don’t want to be bothered with working conditions, fair wages and environmental regulations. If something bad happens, they can always blame the subcontractor and claim no knowledge. Subcontracting provides (more or less) plausible deniability.

The tomato growers, unsurprisingly deny all that. To listen to them, one would think that everything is peachy. However, I would bet that BK is not the only one engaging in such dirty tricks.

And just to piss off the big bad corporations, just click on the logo above and read on these workers conditions and what can be done.

Twenty years after the creation of the label “fair trade” (“commerce equitable” in French) created by Max Havelaar, it is time to reflect on the impact of fair trade practices and their relevance. There are currently multiple events in France to do just that. For two weeks, a variety of workshops and conferences will take stock of the fair trade movement. Numerous cooperatives, such as the Uciri cooperative, from the Oaxaca state in Mexico, which produces coffee or the Brazilian Coagrosol, specialized in organic fruit juice.

Both cooperatives have been certified as fair trade by the Fair Trade Labelling Organizations International (FLO). FLO is a network of 23 organizations that establish fair trade standards and certifications. The certification itself is delivered by an independent certification company, FLO-CERT. The blue and green logo is proof of a certified fair trade product. As its mission statement makes clear:

“FLO-CERT GmbH is an independent International Certification Company offering Fairtrade Certification services to clients in more than 70 countries. As such a company we assist in the socio-economic Development of producers in the Global South and help to foster long-term relationships and good practice with traders of Certified Fairtrade products. Our Certification provides a guarantee to consumers of Certified Fairtrade products that they are contributing to the Social-Economic Development of people through their purchases.”

The Max Havelaar label was developed in 1988 by Franz van der Hoff, a Dutch missionary, and Nico Roozen, from the NGO Solidaridad. The two men wanted to guarantee a fair wage and decent working conditions for small producers, largely poor and isolated, and to promote sustainable development. And in the past 20 years, the rules have not changed much:

Sales prices that are higher than world market prices (to cover the costs of production)

The development of cooperative through financial incentives to pool equipment and technology

The pre-financing of crops (so the producers do not have to borrow and be in debt)

The establishment of long-term commercial ties, with defined prices, to avoid speculation

Today, success is undeniable for coffee, fruits (especially bananas) and organic cotton. This system is designed to benefit small producers from the Global South. And fair trade is now a big business as the demand increases, especially in the European Union. European consumers include more and more an ethical dimension to their consumption practices.